Saudi Arabia has thus far managed to stave off the popular protests that have led to the ouster of four Arab heads of state, chiefly due to its strategic and well-timed disbursements of oil-revenue-funded social giveaways. While so far effective in preserving the status quo, this approach has tied the fate of the monarchy to that of its oil revenues - an increasingly risky linkage.

For decades, Saudi Arabia’s booming oil revenues have been a safe bet in a constantly shifting region. Proud and longtime holder of the world’s largest proven reserves, highest exports, and most spare capacity, Saudi Arabia maintained an unrivaled position of dominance in global oil markets. However, a deeper look at Saudi Arabia’s growing domestic pressures and its external challenges reveal signs of decay in the Kingdom’s global oil market dominance, and with it, weakening defenses against a popular uprising.

The challenges confronting Saudi Arabia are both internal and external. First, domestically, Saudi Arabia’s oil reserves have long been a subject of mystery and speculation. Can the Kingdom’s oil reserves support its current level of production for the next decade and beyond, or is the country approaching its peak? Either way, many sources familiar with Saudi Aramco and Saudi geology believe the Kingdom’s access to easily extractable oil has come to an end. Its fields are aging, and light crude has become scarcer. Many oil experts believe that Saudi Arabia’s future oil production gains will depend on advances in enhanced oil recovery technology to extend the life of existing fields. While advanced techniques may increase production, these techniques can add an additional cost of $20-$60 per barrel, slashing the Kingdom’s profit margin.

Second, Saudi Arabia must accommodate its increasing population, which at approximately 28 million has nearly doubled in the past 20 years and continues to grow at an annual rate of nearly 2.5%. The Saudi youth demographic is among the country’s fastest growing, and is feeling the pain of both underemployment and an acute housing crisis. Throw in the restrictive social environment imposed by the Saudi government and you have a volatile mix resembling the climate in other Arab countries before their uprisings. As regimes crumble all around them, the Saudi people know they have leverage; demands will likely become more numerous and require more expensive pay-outs.

Third, Saudi Arabia’s growing population has increased the demand for energy, infrastructure, and water desalination. Lacking a sophisticated natural gas industry, the Kingdom must use oil for its domestic electricity and infrastructure needs, thus placing pressure on oil exports. Export revenues are critical to the government’s ability to fund massive public giveaways, and the country’s increasing domestic demands have constrained the monarchy’s ability to effectively buy off its population.

Saudi Arabia’s external challenges are no less daunting. The Kingdom faces an evolving and expanding competitive landscape. Iraq’s growing oil production, which could reach 12 million barrels per day by 2017, could significantly cut into Saudi Arabia’s exports and revenues. Even if Iraq only reaches half of its targeted production by 2017, an extra 6 million barrels per day in the global oil markets could diminish the Kingdom’s power within OPEC and possibly make the United States - its bulwark against regional hostiles - a less loyal ally.

In addition, aggressive neighbors are posing an increasing threat to Saudi Arabia’s oil dominance. In October 2011, Saudi Arabia accused an unnamed foreign power, widely understood to be Iran, of instigating violent protests among the Shia community in its eastern province. Iran has also been blamed for plotting to assassinate the Saudi ambassador to the United States. Unlike many of its war-plagued neighbors, Saudi Arabia’s oil industry has enjoyed domestic stability and security. A sustained Iranian campaign to covertly destabilize Saudi Arabia by manipulating Shia populations could threaten the Kingdom’s oil infrastructure, its revenues, and its overall security.

As Saudi Arabia continues to direct resources to fending off an uprising, social reforms addressing its skyrocketing energy consumption, underemployment, and housing crisis have taken a back seat. The Kingdom must focus on the development of solutions to these critical challenges, and prioritize true social reform over transparent largesse. Unless it addresses the internal and external threats to its power, Saudi Arabia’s days as the world’s oil hegemon could be numbered.

The views expressed in this article are solely those of Kathleen Sullivan.

soundoff(137 Responses)

kareem

Americans always pretend to be idols , blaming Arabs for abusing their women!!!!!!!!!!!!!!! i used to live in the USA 3 of my neighbors shot their wife . violence toward women is the highest rate in the world.

Islam does not permit no Kings, nor chosen one by race. Kings, pigs, self center ism is of hinduism darkness of hindu santans, goons, belonging to hindu Pharoha's as man gods and followed by hindus, ignorant in their hinduism, ignorance.

In an ignorant, religion-controlled, medieval society like the moslim world, regimes will come and go, the ignorant people will riot and killeach other as they are made to believe it is the west that causes their misery and on and on... I have no sympathy for these violent, vicious, murderous ignoramuses.

Only by hinduism of a hindu, ignorant, unlike hindered land india, inhabited by hindus, many have come and gone and hindus have learned nothing but be in gutter of gentile ism, slavery of pot head hindu santans, goons, living like animals. Muslims have always stood up to hinduism of hindis of any land and changed the world, so will be now. Watch out hindus, your ex masters, Muslims are on the move again.

I wonder what ever became of sheik Adnon Al Kasid? He was a wealthy middle easter oil sheik who used to manage several professional wrestlers. All of the guys he managed used to cheat a lot to win, and the sheik was a cheater too. He left and they said that he went back to the middle east to manage his families billions. I fear that things may not have gone well for him when he got home, because three months later I heard that he was working at taco bell on the late shift.

I hope get a revolution in Saudi Arabia. Islamic revolution will be led by a man like Osama bin Laden. It is an excellent opportunity to take revenge on America that killed Osama bin Laden. We want jihad against America and Israel. Should be cut oil from the West.

You will get Osama bin Laden new again, if there was a revolution in Saudi Arabia! Please Help us to make a revolution in Saudi Arabia!

February 29, 2012 at 7:42 am |

Common

Saudi Arabia will not have an uprising. Saudi Arabia has always been moving in the right direction. A direction that favors human rights and dignity for all. It isn't as quick as we Americans would like, but progress is progress. The Kingdom has plenty of money, and take care of their own very well. Not everybody in the World is in favor of a democracy. Russian's, Chechens, Libyans, North Koreans, and other countries favor armed guards through out their countries. We need to remind ourselves of cultural distances and how they effect perceptions.

You write realistically. I visited Saudi Arabia before 5 years, the Saudi people get a lot of money from the government. Each student gets a high school diploma, the government send him to any country of his choice. We have here at the University of Maastricht in Holland, Saudi 40 students. Now there are 30,000 students studying in America. Saudi people receive excellent medical care without money . King and the rest of aides greet people every week to let them know their demands, which wants to help get this financial assistance, to suffer from a serious illness and wants treatment in Western countries, the government sends him to America or Europe for treatment.That their democracy . Therefore, the Saudis dont need demonstrations. But I noticed that they pray in the mosques 5 times every day!! Saudi society is very religious!

hindu is not a person but a designation, from hanood, secular or self centered, denier of limit of truth absolute 360* being hindu is an act of defiance in soul, desire to be in hindrance to truth absolute. Nothing personal. Neither it racial nor it religious, just plain designation.

Leave the Saudis alone. They are the strongest power over there and right now they deal and trade with everybody including America, Russia and China. Don't go stirring up crap with them, CNN nut bags. Prince Awaleed has the most beautiful wife in the world and only one. She is promoting women's rights and pushing for a change to allow women to drive over there. He owns controlling interest in Citi Corp who have the most mortgages out there right now in the USA. . Want to see your housing go down to $1 a house? Mess with the Saudis. They are smart, savvy, rich, powerful, and tough as nails. And currently Western friendly. I think some journalists are slightly mentally defective.

More than 50% of Americans believe that the 11/9 was an inside job!! Al Qaeda biggest lie in history!! Al Qaeda in Afghanistan was made by CIA to fight the Soviet occupation of Afghanistan!! We know the truth!! Saudis are legion, and they cannot launch an attack on America!! We Europeans know that you are liars!! I want to ask you, who killed President John Kennedy?! Of course you do not know!! because the Zionists rule America!!

Dear Americans, do you know what was written about this topic?! Because Saudi Arabia has begun arming the rebels in Syria, the Americans are evil and want continued massacres in Syria by the ruling minority Alawite in Syria. On this day, the Guardian newspaper in Britain has allowed an Islamic Saudi dissident to write an article about the "revolution in Saudi Arabia." .He said "Yes, the revolution in Saudi Arabia are ready, but we need a man like Bouazizi to burn himself and start the revolution!! this mam is " Saad al-Faqih. "Is an Islamic fundamentalist. Is required from the West to help him to get his power in Saudi Arabia. Will then declare jihad against Israel and the West, and cut oil from America and Europe!! there is no democratic opposition in Saudi Arabia, all fundamentalist Islamic opposition in Saudi Arabia.I'm sure that if Saudi Arabia stopped arming rebels Syria, will not watch topics for the "revolution in Saudi Arabia," CNN, the Guardian exercising political blackmail to Saudi Arabia to stop arming the rebels in Syria. America and Britain without morals! They refuse to Syria arming the rebels, and dont want military intervention to protect the people of the Syrian massacres!!

Before thinking about a revolution in Saudi Arabia, we should make a revolution in Iran against the rule of the clergy. They want to make nuclear weapons to destroy Israel, and nuclear attack on the West. If Iran built a nuclear weapon, we will get at 11/9 nuclear!! Please Dont prevent Israel from attacking Iran. Terrorists who rule Iran will destroy Western civilization, if they made a nuclear weapon! Wake up!

These stupid greedy guys won't spend single dollar to any poor countries for their food, health, education, etc. Even for Tunami or Earth Quake disasters also they won't give. All they can do it, marry as much as possible or for bringing girls from other countries. what kind of religion is this. Just few law from this fools, rapping victim should provide 4 male eye witness, who should have long beard. If anyone (X) killed others (Y) and if 'Y' family accept blood money from 'X', then there won't be any punishment for criminal 'X'. money only speaks. can you point any one single muslim country in this world is ruled by good governance with good development, etc you sick people.

Unless the King agrees to remove Viagra from his diet, I see no chances of avoiding the spring. Are you kidding ? I think Its only a matter of time, that royals got away with trillions of oil revenue from half a century, they cannot buy people with few billions of bonuses, they certainly become even more richer by buying out stocks and investing all over the world. Oppression never works. Human rights, Illiteracy, unemployment and poverty is what they got. Long Live Freedom ! Long Live Democracy !

Saudi Arabia accused an unnamed foreign power, widely understood to be Iran, of instigating violent protests among the Shia community in its eastern province. Iran has also been blamed for plotting to assassinate the Saudi ambassador to the United States.??????????????????

Please. The Saudi Government is the worst government. They oppress Women and Shia. They do not understand Islam.
The Wahabis are so cruel and dirty. I went to hajj and the saudi people have no respect for women and certain people with in Islam. They do not take care of their own people, hospitals suck. They have All that money and cannot help their own people.

Uprisal is comming but not yet and so long as,
-Saudi rulers flood the market with millions of barrels of oil (in excess of its needs) to keep prices down, bribing the west.
-The active youth are brain washed and sent to Arab & muslim countries to blow themselves up for blood shed, then the only stable country is Saudi Kingdom, clever is it not?
– It remain as a US colony with its oil owned by and as a Credit to the US Dollar.
– It remain behind all unrest and bloodshed in the Arab & muslim world and especially the newly librated countries.Who was behind the destruction of Iraq and now Syria, Lybia, Egypt, Yemen..... It is Saudi oil revenue and conspiracy.
Only when the oil drain or the youth relise their ignorance falling in the rulers trap, then its the end.
Stupid who think the Saudis build Mosques for the love of Islam, Its to be used as a media for the monarch familly and to beautify their ugly face.
The whole region will be in peace when the uprisal start in Saudi Arabia and this corrupt familly rule end.

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